<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
APPNET, INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
0001066197
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(CUSIP Number)
ROBERT M. TARKOFF, ESQ.
COMMERCE ONE, INC.
4440 ROSEWOOD DRIVE
PLEASANTON, CALIFORNIA 94588
(925) 520-6000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
JUNE 20, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
Page 1 of 9 Pages
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CUSIP No. 0001066197 SCHEDULE 13D Page 2 of 9 Pages
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(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Commerce One, Inc. I.R.S. Identification No.: 68-0322810
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
N/A
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(3) SEC Use Only
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(4) Source of Funds*
WC, OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
N/A
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(6) Citizenship or Place of Organization
STATE OF DELAWARE
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Number of Shares (7) Sole Voting
Beneficially Owned Power 6,765,501 (1)
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 11,660,906 (2)
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(9) Sole Dispositive
Power 6,765,501 (1)
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(10) Shared Dispositive
Power N/A
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
18,426,407 (1) (2)
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
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(13) Percent of Class Represented by Amount in Row (11)
54.2%
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(14) Type of Reporting Person*
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
(1) In the event the Option (discussed in Items 3 and 4 below) becomes
exercisable and is exercised in full, Commerce One, Inc. ("Commerce One") will
have sole voting power with respect to that number of shares equal to 19.9% of
the then outstanding shares of Common Stock of AppNet, which, based upon the
33,997,491 shares of AppNet Common Stock outstanding as of June 20, 2000 (as
represented by AppNet in the Merger Agreement discussed in Items 3 and 4)
currently equals 6,765,501 shares of AppNet Common Stock. Prior to the exercise
of the Option, Commerce One is not entitled to any rights as a stockholder of
AppNet as to the shares of AppNet Common Stock covered by the Option. The Option
may only be exercised upon the happening of certain events referred to in Item
4, none of which has occurred as of the date hereof. Commerce One expressly
disclaims beneficial ownership of any of the shares of AppNet Common Stock which
are purchasable by Commerce One upon exercise of the Option until such time as
Commerce One purchases any such shares of AppNet Common Stock upon any such
exercise.
(2) Approximately 11,660,906 shares (including options exercisable
within 60 days of June 20, 2000) of AppNet Common Stock are subject to Voting
Agreements entered into by Commerce One and certain stockholders of AppNet
(discussed in Items 3 and 4 below). Commerce One expressly disclaims beneficial
ownership of any of the shares of AppNet Common Stock covered by the Voting
Agreements. Based on the number of shares of AppNet Common Stock outstanding as
of June 20, 2000 (as represented by AppNet in the Merger Agreement discussed in
Items 3 and 4), the number of shares of AppNet Common Stock indicated represents
approximately 34.2% of the outstanding AppNet Common Stock, excluding the shares
of outstanding shares of AppNet Common Stock issuable upon exercise of the
Option.
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CUSIP No. 0001066197 SCHEDULE 13D Page 3 of 9 Pages
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (this "Statement") relates to
the Common Stock of AppNet, Inc., a Delaware corporation
("AppNet" or "Issuer"). The principal executive offices of
AppNet are located at 6707 Democracy Boulevard, Suite 1000,
Bethesda, Maryland 20817.
ITEM 2. IDENTITY AND BACKGROUND
The name of the corporation filing this statement is Commerce
One, Inc., a Delaware corporation ("Commerce One"). Commerce
One is a leader in global e-commerce solutions for business.
The address of Commerce One's principal business is 4440
Rosewood Drive, Pleasanton, California 94588. The address of
Commerce One's executive offices is the same as the address of
its principal business.
Set forth on Schedule A is the name of each of the directors
and executive officers of Commerce One, and their present
principal occupation or employment, including the name,
principal business and address of any corporation or other
organization in which such employment is conducted, as of the
date hereof to Commerce One's knowledge.
Neither Commerce One, nor to Commerce One's knowledge, any
person named on Schedule A hereto is required to disclose
legal proceedings pursuant to Items 2(d) or 2(e). To Commerce
One's knowledge, except as set forth on Schedule A, each of
the individuals identified on Schedule A is a citizen of the
United States.
As a result of entering into the form of Voting Agreement
described in Items 3 and 4 below, the Reporting Person may be
deemed to have formed a "group" with each of the Stockholders
(as defined in Item 3 below), for purposes of Section 13(d)
(3) of the Act and Rule 13d-5 (b) (1) thereunder. Commerce One
expressly declares that the filing of this Schedule 13D shall
not be construed as an admission by it that it has formed any
such group.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to an Agreement and Plan of Reorganization dated as
of June 20, 2000 (the "Merger Agreement"), among Commerce One,
Constitution Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of Commerce One ("Merger Sub") and
AppNet, and subject to the conditions set forth therein
(including approval by stockholders of AppNet), Merger Sub
will merge with and into AppNet and AppNet will become a
wholly-owned subsidiary of Commerce One (such events
constituting the "Merger"). Once the Merger is consummated,
Merger Sub will cease to exist as a corporation and all of the
business, assets, liabilities and obligations of
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CUSIP No. 0001066197 SCHEDULE 13D Page 4 of 9 Pages
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Merger Sub will be merged into AppNet with AppNet remaining as
the surviving corporation (the "Surviving Corporation").
As an inducement to Commerce One to enter into the Merger
Agreement, Commerce One and AppNet entered into a Stock Option
Agreement dated as of June 20, 2000 (the "Stock Option
Agreement") pursuant to which AppNet granted Commerce One the
right (the "Option"), under certain conditions, to acquire up
to the number of shares of AppNet Common Stock sufficient to
give Commerce One ownership of 19.9% of AppNet's outstanding
Common Stock. AppNet's obligation to issue shares pursuant to
the exercise of the Option is subject to the occurrence of
certain events (discussed in Item 4 below), which may not
occur. The granting of the Option was negotiated as a material
term of the entire Merger transaction. Commerce One did not
pay additional consideration to AppNet in connection with
AppNet entering into the Stock Option Agreement and granting
the Option. In the event the Option becomes exercisable,
Commerce One anticipates it will use working capital for any
exercise of the Option.
As a further inducement for Commerce One to enter into the
Merger Agreement and in consideration thereof, certain
stockholders of AppNet (the "Stockholders") entered into
individual voting agreements with Commerce One (collectively
the "Voting Agreements") whereby each Stockholder agreed,
severally and not jointly, to vote all of the shares of AppNet
Common Stock beneficially owned by him in favor of approval
and adoption of the Merger Agreement and approval of the
Merger and certain related matters. Commerce One did not pay
additional consideration to any Stockholder in connection with
the execution and delivery of the Voting Agreements.
References to, and descriptions of, the Merger, the Merger
Agreement, the Stock Option Agreement and the Voting
Agreements as set forth herein are qualified in their entirety
by reference to the copies of the Merger Agreement, the Stock
Option Agreement and the Voting Agreement, respectively,
included as Exhibits 1, 2 and 3, respectively, to this
Schedule 13D, and are incorporated herein in their entirety
where such references and descriptions appear.
ITEM 4. PURPOSE OF TRANSACTION
(a) - (b) As described in Item 3 above, this statement relates
to the Merger of Merger Sub, a wholly-owned subsidiary of
Commerce One, with and into AppNet in a statutory merger
pursuant to the Delaware General Corporation Law. At the
effective time of the Merger, the separate existence of Merger
Sub will cease and AppNet will continue as the Surviving
Corporation and as a wholly-owned subsidiary of Commerce One.
Each holder of outstanding AppNet Common Stock will receive,
in exchange for each share of AppNet Common Stock held by such
holder, 0.8 shares of Commerce One Common Stock. Commerce One
will assume each outstanding
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CUSIP No. 0001066197 SCHEDULE 13D Page 5 of 9 Pages
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option to purchase AppNet Common Stock Option under AppNet's
stock option plans.
Pursuant to the Stock Option Agreement AppNet granted Commerce
One the Option, under certain conditions, to acquire up to the
number of shares of AppNet Common Stock sufficient to give
Commerce One ownership of 19.9% of AppNet's outstanding Common
Stock. AppNet's obligation to issue shares pursuant to the
exercise of the Stock Option is subject to the occurrence of
certain events (each, an "Exercise Event"), which may not
occur. In general, an Exercise Event may be deemed to occur:
(a) if there is a material breach by AppNet of the
non-solicitation provisions of the Agreement; (b) if (i) the
Board of Directors of AppNet or any committee thereof shall
for any reason have withdrawn or shall have amended or
modified in a manner adverse to Commerce One its unanimous
recommendation in favor of, the adoption and approval of the
Merger Agreement or the approval of the Merger; (ii) AppNet
shall have failed to include in the Prospectus/Proxy Statement
the unanimous recommendation of the Board of Directors of
AppNet in favor of the adoption and approval of the Merger
Agreement and the approval of the Merger; (iii) the Board of
Directors of AppNet fails to reaffirm its unanimous
recommendation in favor of the adoption and approval of the
Merger Agreement and the approval of the Merger within five
(5) days after Commerce One requests in writing that such
recommendation be reaffirmed at any time following the
announcement of an Acquisition Proposal (as defined in Section
5.4(a) of the Merger Agreement); (iv) the Board of Directors
of AppNet or any committee thereof shall have approved or
recommended any Acquisition Proposal (v) AppNet shall have
entered into any letter of intent or similar document or any
agreement, contract or commitment accepting any Acquisition
Proposal; or (vi) a tender or exchange offer relating to
securities of AppNet shall have been commenced by a Person (as
defined in the Merger Agreement) unaffiliated with Commerce
One and AppNet shall not have sent to its securityholders
pursuant to Rule 14e-2 promulgated under the Securities Act of
1933, as amended, within ten (10) business days after such
tender or exchange offer is first published, sent or given, a
statement disclosing that AppNet recommends rejection of such
tender or exchange offer; or (c) if the Merger Agreement is
terminated by either Commerce One or AppNet because the Merger
shall not have been consummated by January 31, 2001, or
because the AppNet stockholders fail to approve the Merger
Agreement and the Merger, and prior to the date of termination
of the Merger Agreement a third party has announced an
Acquisition Proposal and within twelve months following the
termination of the Merger Agreement or acquisition of AppNet
is consummated or AppNet enters into an agreement or letter of
intent providing for such an acquisition.
Pursuant to the Voting Agreements, the Stockholders have
irrevocably appointed Commerce One as their lawful attorney
and proxy. Such proxy gives Commerce One the limited right to
vote each of the 11,660,906 shares (including options
exercisable
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CUSIP No. 0001066197 SCHEDULE 13D Page 6 of 9 Pages
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within 60 days of June 20, 2000) of AppNet Common Stock
beneficially owned by the Stockholders in all matters related
to the Merger. In exercising its right to vote the Shares as
lawful attorney and proxy of the Stockholders, Commerce One (or
any nominee of Commerce One) will be limited, at every AppNet
stockholders meeting and every written consent in lieu of such
a meeting to vote the Shares in favor of approval and adoption
of the Merger Agreement, in favor of approval of the Merger and
in favor of each matter that could reasonably be expected to
facilitate the Merger. The Stockholders may vote the Shares on
all other matters. The Voting Agreements terminate upon the
earlier to occur of (i) such date and time as the Merger shall
become effective in accordance with the terms and provisions of
the Merger Agreement, and (ii) such date and time as the Merger
Agreement shall have been terminated pursuant to Article VII
thereof.
The purpose of the transactions under the Voting Agreements
and the Stock Option Agreement are to enable Commerce One and
AppNet to consummate the transactions contemplated under the
Merger Agreement.
(c) Not applicable.
(d) It is anticipated that upon consummation of the Merger,
the directors of the Surviving Corporation shall be the
current directors of Merger Sub. It is anticipated that the
initial officers of the Surviving Corporation shall be the
current officers of AppNet.
(e) Other than as a result of the Merger described in Item 3
above, not applicable.
(f) Not applicable.
(g) Upon consummation of the Merger, the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to
the Merger, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by
Delaware Law and such Certificate of Incorporation. Upon
consummation of the Merger, the Bylaws of Merger Sub, as in
effect immediately prior to the Merger, shall be the Bylaws of
the Surviving Corporation until thereafter amended.
(h) - (i) If the Merger is consummated as planned, the AppNet
Common Stock will be deregistered under the Act and delisted
from The Nasdaq National Market.
(j) Other than described above, Commerce One currently has no
plan or proposals which relate to, or may result in, any of
the matters listed in Items 4(a) - (j) of Schedule 13D
(although Commerce One reserves the right to develop such
plans).
References to, and descriptions of, the Merger Agreement, the
Stock Option Agreement and the Voting Agreements as set forth
above in this Item 4 are qualified
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CUSIP No. 0001066197 SCHEDULE 13D Page 7 of 9 Pages
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in their entirety by reference to the copies of the Merger
Agreement, the Stock Option Agreement and the Voting Agreement,
respectively, included as Exhibits 1, 2 and 3, respectively, to
this Schedule 13D, and are incorporated in this Item 4 in their
entirety where such references and descriptions appear.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) As a result of the Voting Agreements, Commerce One
may be deemed to be the beneficial owner of at least
11,606,906 shares of AppNet Common Stock (including options
exercisable within 60 days of June 20, 2000). Such AppNet
Common Stock constitutes approximately 34.2% of the issued and
outstanding shares of AppNet Common Stock based on the number
of shares of AppNet Common Stock outstanding as of June 20,
2000 (as represented by AppNet in the Merger Agreement
discussed in Items 3 and 4). Commerce One may be deemed to
have the shared power to vote the Shares with respect to those
matters described above. However, Commerce One (i) is not
entitled to any rights as a stockholder of AppNet as to the
Shares and (ii) disclaims any beneficial ownership of the
shares of AppNet Common Stock which are covered by the Voting
Agreements.
In the event the Stock Option becomes exercisable and is
exercised in full, Commerce One will have the sole power to
vote, and the sole power to dispose of, that number of shares
equal to 19.9% of the then outstanding shares of AppNet Common
Stock, which, based upon the 33,997,491 shares of AppNet
Common Stock outstanding as of June 20, 2000, currently equals
6,765,501 shares of AppNet Common Stock.
Set forth on Schedule B is the name of those stockholders of
AppNet that have entered into a Voting Agreement with Commerce
One, and their present principal occupation or employment,
including the name, principal business and address of any
corporation or other organization in which such employment is
conducted, to Commerce One's knowledge.
To Commerce One's knowledge, no transactions in the class of
securities reported have been effected during the past sixty
days by any person named pursuant to Item 2.
(c) To the knowledge of Commerce One, no transactions in the
class of securities reported have been effected during the
past sixty days by any person named pursuant to Item 2.
(d) To the knowledge of Commerce One, no other person has the
right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the
securities of AppNet reported on herein.
(e) Not applicable.
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CUSIP No. 0001066197 SCHEDULE 13D Page 8 of 9 Pages
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Other than the Merger Agreement and the exhibits thereto,
including the Voting Agreements and the Stock Option
Agreement, to the knowledge of Commerce One, there are no
contracts, arrangements, understandings or relationships among
the persons named in Item 2 and between such persons and any
person with respect to any securities of AppNet, including but
not limited to transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangement,
puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Agreement and Plan of Reorganization, dated June 20,
2000 by and among Commerce One, Merger Sub and AppNet
(incorporated by reference to exhibits to the Current
Report on Form 8-K filed by Commerce One, Inc. on
June 29, 2000 (File No. 000-26453)).
2. Form of Voting Agreement, dated June 20, 2000,
between Commerce One and certain stockholders of
AppNet, (incorporated by reference to exhibits to the
Current Report on Form 8-K filed by Commerce One,
Inc. on June 29, 2000 (File No. 000-26453)).
3. Stock Option Agreement dated June 20, 2000 by and
between Commerce One and AppNet. (incorporated by
reference to exhibits to the Current Report on Form
8-K filed by Commerce One, Inc. on June 29, 2000
(File No. 000-26453)).
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CUSIP No. 0001066197 SCHEDULE 13D Page 9 of 9 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 5, 2000
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(Date)
COMMERCE ONE, INC.
/s/ ROBERT M. TARKOFF
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(Signature)
Robert M. Tarkoff
Senior Vice President,
Corporate Development and
General Counsel
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(Name/Title)
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SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF
COMMERCE ONE, INC.
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
Commerce One. Except as indicated below, the business address of each such
person is 4440 Rosewood Drive, Pleasanton, California 94588.
<TABLE>
<CAPTION>
Officers Name Title and Present Principal Occupation
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<S> <C>
Mark B. Hoffman Chairman of the Board and Chief Executive Officer
Robert M. Kimmitt Vice Chairman of the Board and President
Charles J. Donchess Executive Vice President and Chief Strategy Officer
Mark S. Biestman Senior Vice President, Worldwide Sales
Kirby B. Coryell Senior Vice President, Services
Carl O. Falk Senior Vice President, Global Trading Web
Peter F. Pervere Senior Vice President and Chief Financial Officer
Samuel C. Prather Senior Vice President, Engineering
Robert M. Tarkoff Senior Vice President Corporate Development,
General Counsel and Secretary
Thomas J. Gonzales Senior Vice President and Chief Technology Officer
Jay M. Tenenbaum, Ph.D. Senior Vice President and Chief Scientist
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Directors Name Title and Present Principal Occupation
-------------- --------------------------------------
<S> <C>
John V. Balen Director, General Partner of Canaan Partners
William B. Elmore Director, Manager of Foundation Capital Management, L.L.C.
David H. J. Furniss* Director, General Manager, Electronic Business of British
Telecommunications plc
Kenneth C. Gardner Director, President and Chief Executive Officer of Sagent
Technology, Inc.
Thomas J. Gonzales Director, Senior Vice President and Chief Technology Officer
William J. Harding Director, General Partner of Morgan Stanley Dean Witter
Venture Partners
Mark B. Hoffman Chairman of the Board and Chief Executive Officer
Robert M. Kimmitt Vice Chairman of the Board and President
Noriyoshi Osumi** Director, Vice President of NTT America
Jay M. Tenenbaum, Ph.D. Director, Senior Vice President and Chief Scientist
Jeffrey T. Webber Director, President of R.B. Webber & Company
</TABLE>
*Citizen of the United Kingdom
**Citizen of Japan
<PAGE>
SCHEDULE B
The following table sets forth the name and present principal occupation or
employment of each AppNet stockholder that entered into a voting agreement with
Commerce One. Except as indicated below, the business address of each such
person is 6707 Democracy Boulevard, Suite 1000, Bethesda, Maryland 20817.
<TABLE>
<CAPTION>
Voting Agreement Shares Beneficially
Stockholder Present Principal Occupation Owned
----------- ---------------------------- -----
<S> <C> <C>
Ken S. Bajaj Chairman and Chief Executive Officer 2,694,444(a)
Jack Pearlstein Senior Vice President and Chief Financial 93,202(b)
Officer
Sherry L. Rhodes Vice President and General Counsel --
Phillip A. Canfield Principal, GTCR Golder Rauner, L.L.C. 6,298
J.B.W. Cross Executive Vice President, Strategy Consulting 84,444
GTCR Fund VI, L.P. --- 8,586,795
GTCR VI Executive Fund, L.P. --- 61,559
GTCR Associates VI --- 19,441
Edward C. Meyer Chairman, Mitretek Systems, Inc. 5,000
Richard N. Perle Chairman, Hollinger Digital, Inc. 65,000
Bruce V. Rauner Managing Principal, GTCR Golder Rauner, L.L.C. 39,723
James R. Thompson Partner, Winston & Strawn 5,000
-----
Total: 11,660,906
</TABLE>
(a) Represents 2,624,269 shares of outstanding AppNet Common Stock and
70,175 shares subject to options exercisable within 60 days of June
20, 2000.
(b) Represents 47,368 shares of outstanding AppNet Common Stock and 45,834
shares subject to options exercisable within 60 days of June 20, 2000.
